Written by the reviewer from the ASR + docket; [verbatim-ASR] = quoted machine transcript; [paraphrase] = reviewer's wording, not a quote.
0:00 I'll go ahead and call the April 20th, 2026 Finance Committee meeting to order at 631.
0:12 Councilman Bullock isn't here, but he's on the committee.
0:14 I'm sure he's walking in right now.
0:16 We have a full committee, which is good, and I'll give him a moment to come out
0:23 It feels like a long time.
0:24 I was on spring break and then we didn't have council last week, so I think this
0:28 is the latest in a month I've ever stepped on the dais for city council, so it's the 20th.
0:34 But we're back to work.
0:37 First order of business is to review and approve the March 23rd, 2026 Finance Committee
0:45 Without objection, they are approved.
0:48 And then we have a couple ordinances on our docket this evening that we'd like
0:55 The first two, I think we can kind of take them in order, and it's a little out of the
1:00 typical course, so interesting discussion with the finance director on the record
1:04 about the reason for that, but there are our typical transfer and advances ordinance.
1:10 So first one is ordinance number 22, 2026, which is, I believe, the second quarter
1:18 transfer and advances ordinance, and then ordinance 23, 2026, which is the third quarter
1:26 transfer and advance ordinance, which, if I remember correctly, typically comes later
1:31 So first things first, just going over these, I think they're the same as they
1:36 always are every year, and then the real meat is in the fourth quarter transfer
1:39 and advances ordinance when kind of the numbers are really trued up for the end
1:46 of the year, and then we kind of subtle the books, but Director Mahoney, can you
1:49 speak as to why you put them both on the docket at the same time?
1:54 Basically just to be more efficient.
1:55 So the first quarter ordinance always is a little different because we'll do
2:01 advance repayments to whatever funds that we might have needed to advance
2:06 money to at the end of the prior year, and like you said, the fourth
2:10 quarter is different because of that same reason.
2:15 We're not quite sure at the end of the year if any funds need a little help
2:18 going into the end of the year, or if there's the ability to perhaps move
2:26 some money, if the coffers have a little extra to reserve some, but the
2:34 second and third are just one-fourth of the budgeted transfers.
2:40 Historically, they have presented just the second quarter and then come back
2:45 a couple months later to do the third quarter, and since they're identical
2:48 and it's kind of just something we just always do, I thought it might just
2:54 be a little more efficient to do two and three together.
2:59 So the question I have, does this affect cash flow, or is this just a
3:04 you have approval so those transfers happen?
3:08 Yeah, so we will just hold the third quarter until the third quarter
3:13 happens and then do the transfer in the third quarter.
3:20 Any comments or questions from committee members?
3:25 Councilperson Struvig?
3:26 Could you just give a little more detail on the transfer out and the
3:29 transfer ends, where this is coming from, and I'm looking at the
3:34 special revenue funds and where that money is coming from for
3:37 Winterhurst and the Office on Aging.
3:39 Is that the county there or just a little more detail on that?
3:45 So especially those two funds, they can't survive without help from
3:52 So you'll see $325,000 transfer out of the general fund, and that's
3:59 to support fund 250, the aging for $225,000, and then Winterhurst for
4:07 So those funds don't bring in enough money on their own to support
4:12 themselves, so general fund needs to help them out.
4:22 And I'm just procedurally thinking through, as a committee, kind of what
4:30 I mean, do we keep the third quarter one in here and then pop it off
4:34 later, or do we approve it now?
4:35 I mean, Director Vargo, does it matter from the law department's
4:45 Sorry to catch you off guard.
4:46 No, I'm going to make a terrible admission, Mr. Chair.
4:49 I wasn't paying attention to that issue.
4:54 Yeah, so basically, typically, there's a second quarter transfers
5:00 and advances ordinance that, as Director Mahoney explained, the
5:04 first quarter is a lot of refilling the buckets from the end of the
5:08 year from, for example, federal funds that are always late.
5:11 Second and third quarter are typically just a quarter of the
5:13 budget where we transfer.
5:15 The fourth quarter is then where the real work is in these ordinances.
5:19 Director Mahoney, I think you saved yourself some drafting by putting
5:23 them into the same time, because they're basically identical except
5:27 one says third quarter and one says second quarter, and the
5:30 ordinance numbers are different.
5:31 So I'm just trying to understand if there's, like, a legal reason
5:35 why we may want to hold the third quarter on committee and then
5:39 pass it out, but just because it's something we haven't done before.
5:44 I can't think of a reason, Mr. Chair.
5:49 I certainly defer to the judgment of the finance director on the
5:53 efficiency of it, and I don't perceive any legal issue with it.
5:59 And, Chairman, I was just thinking if we didn't have anything
6:03 else for the third quarter, just to need to have a finance
6:07 committee just for a transfer ordinance, save everyone a little time.
6:13 I guess it begs the question, if we just had one and it transferred
6:20 double these amounts, would that not do that?
6:24 We could authorize that.
6:26 Maybe, I mean, I can either change ordinances for this year
6:29 or consider that for next year.
6:31 I did think about that, but I didn't want to put too much
6:34 change at once, and I know Council's used to four separate
6:41 So thank you for the discussion and for the eye towards
6:44 innovation, Director Mahoney, or improvement of our regular process.
6:48 You know, the obvious point would be that that's a quarterly
6:53 opportunity to track and follow and oversee how expenditures
7:00 So what we're talking about is following the budget,
7:04 the budget's forecast.
7:07 One thing we don't do, or we haven't done routinely anyway,
7:10 is to go through the actuals.
7:12 I know that the department does provide written summaries,
7:17 I think, on a monthly basis of year-to-date spending.
7:21 There's some good information there.
7:23 You know, one option would be, at whatever appropriate time,
7:28 we evaluate or we just review together in committee for the
7:33 public record how the actuals are going at the given date of
7:38 that potential finance committee hearing.
7:42 Because there's information that's useful there.
7:45 Sometimes it's just a timing matter, for example,
7:48 if a road pavement project is happening a month ahead of time
7:53 or a month later due to scheduling of a contract.
7:59 But there's other, you know, maybe more impactful news
8:05 like have we filled all of our positions earlier or later?
8:11 You know, and that has an impact on salaries
8:14 and benefits expenditures.
8:16 So, you know, I guess my thought would be rather
8:20 than pre-approve the transfers and then not talk again
8:26 until we're looking at the fourth quarter,
8:30 which would go into the year-end appropriations update
8:34 and often those year-end appropriations updates move
8:38 around money in quite significant amounts
8:44 that we use the mid-year, you know, we could do it late June
8:50 or early July and say, okay, how are the expenditures
8:56 and revenue collections to date looking compared
9:01 to what our budget has said
9:03 and then consider a third quarter transfer?
9:05 I'm sorry for being long-winded.
9:10 No, I think your point is well taken and I think,
9:12 I think what you're getting at is
9:16 that the fourth quarter one is the most meaningful one
9:18 and we often see it and then we're in the middle of budget.
9:21 But it's probably forecasted or understood at least
9:25 with reasonable certainty before it hits the docket
9:28 in December or November.
9:30 So, you're raising up a bigger point which I think I'm ready
9:33 to vote these out of committee, one person,
9:35 and get this moving.
9:38 But what I think might be nice
9:40 from the finance department is if there's a communication.
9:43 Now, when do you start to see through the forest
9:48 as to what those fourth quarter amounts are going to be?
9:52 Is this a June issue?
9:53 July, August, September, October?
9:56 November probably or December even,
9:59 because we don't know, like you had said,
10:01 the federal funds, we're never quite sure
10:03 maybe they'll come in in December or maybe they won't.
10:06 So, it's a pretty late in the year judgment
10:09 as to how much those advances or transfers need to be.
10:13 Because I think what Councilman Bulk is talking about
10:16 and this is where I owe the council president
10:19 some discussion about the budget.
10:20 I know you guys, we're in April,
10:25 for Christ's sake, we're probably already talking budget,
10:27 which I think is accurate, right?
10:28 You guys are probably gonna start meeting June, July
10:31 with department heads.
10:32 With the new finance system, more like July, August.
10:37 Okay, because I guess what I'm telegraphing
10:42 is that you may see a communication
10:45 that I work with you on,
10:47 because I think revenues are gonna be
10:48 an important part of that, right?
10:51 And where our spend is, as Councilman Bulk said,
10:54 positions management is a way to save money,
10:56 whether that's good or bad.
10:58 And then also, where money comes in.
11:01 We do get those, I think it's now not every month,
11:05 but every quarter we get an email
11:08 from the finance department that,
11:11 from Assistant Director Eddy,
11:12 that lays out kind of where we're at.
11:15 When we get one of those,
11:16 I think it might make sense to
11:18 then trigger communication to the docket
11:20 to then talk about that in committee,
11:23 so that we understand what it's looking like.
11:26 I remember we were going through the budget last year,
11:28 and this is just, it was a good thing.
11:32 I think it was like eight or nine million dollars
11:33 went back into the general fund from the budget,
11:35 which kudos the administration for managing the funds.
11:40 Yeah, and we kind of made some calls
11:41 about whether it goes into debt service
11:43 or goes back into general fund.
11:43 So those are all good things.
11:45 I just think the visibility on council
11:48 kind of before we see the budget book
11:50 as opposed to after, I think would be good.
11:55 So does that sound good to everyone
11:59 as far as the process?
12:03 I'm a fan of efficiencies,
12:05 and I appreciate that you saw two duplicates here
12:08 that seems logical to me
12:10 to just knock them out while we can.
12:12 I also think I hear my colleagues saying that
12:16 by doing that with the second one,
12:18 by going ahead and doing that now
12:20 is that we don't see that,
12:21 and it doesn't trigger a conversation later.
12:24 So I am in agreement with that.
12:26 I think that, well again, Director Mahoney,
12:29 I appreciate that they're both the same.
12:32 I think that having one at a later time
12:36 allows us to then dive into
12:38 what the matters are at the moment.
12:42 Yeah, I think what we can do,
12:44 so Director Mahoney,
12:47 you guys prepare quarterly reports to us
12:49 on revenue and expenses, percentage of budgets.
12:53 I think the half-year report table
12:56 that comes out in July.
12:58 Actually, it's every month,
13:00 except January and February
13:02 because it's so early in the year.
13:04 Those reports really aren't,
13:07 the budgets are, obviously,
13:09 if you go over budget in January or February,
13:10 you're in real trouble.
13:12 So Director Eddy starts those in March,
13:16 and then it's every month.
13:17 Okay, but then she does,
13:20 there used to be an analysis every month,
13:22 but now it's an analysis quarterly.
13:24 Something went from monthly to quarterly recently.
13:28 I remember emailing with Assistant Director Eddy
13:30 Okay, I'm only aware of the monthly,
13:33 I only look at the monthly reports.
13:37 what I propose to do
13:39 in consultation with the clerk's office as well
13:42 is after August recess,
13:45 the first meeting in September,
13:47 to have a communication to the docket
13:49 that takes in our finances through August,
13:54 and then we refer it to committee
13:55 to talk about where we're at in the budget year,
13:58 what revenues look like for next year,
14:00 what collections look like for this year,
14:02 and then that will kind of,
14:05 because usually the budget hits,
14:06 I think, in November.
14:09 So we kind of get a precursor to that.
14:11 Now, that's gonna be,
14:13 I think we should start thinking about our priorities
14:15 and coordinating with the administration in May and June,
14:20 but you don't know how big the pie is
14:23 unless you know what the revenue is,
14:24 and so that's gonna determine a lot of things.
14:26 So would that be something
14:27 that the finance department would be willing to do
14:29 if we referred it in September?
14:34 Council President Campbell.
14:37 In the context of the greater conversation,
14:40 some of you should be getting an email from me shortly
14:42 about with scheduling dates for council budget retreat,
14:46 looking more in the May and June timeframe,
14:49 as we talked with Director Mahoney
14:50 about talking with the finance department sooner
14:53 about council budget priorities.
14:54 So as part of that broader conversation
14:57 about those priorities,
14:58 and then once we see the finance department
15:01 be more aware of those as we go in,
15:04 and then as the conversation about those transfers
15:09 and the revenues and those sorts of things,
15:10 and that can be part of that conversation too.
15:14 So this is all working out nicely.
15:17 And I guess in line with that,
15:18 then I will make a motion to refer favorably ordinances.
15:22 Well, first I'll do ordinance 2022, 2026
15:26 to council for approval.
15:32 Motion to amend discussion.
15:34 All those in favor say aye.
15:38 I'll also make a motion to favorably refer
15:40 to full council for approval ordinance 23, 2026.
15:45 Motion to amend, second, any discussion?
15:48 All those in favor say aye.
15:50 Okay, now we're on the next batch
15:54 of ordinances and resolutions,
15:56 which is, I think they're together largely.
16:00 Resolution 2026-21,
16:04 resolution 2026-22,
16:06 and resolution 2026-23.
16:10 Can you walk us through those, Director Mahoney?
16:14 Sure, so actually just, we can get rid of one.
16:19 I just recently learned that the county
16:22 will no longer be submitting advances to the city.
16:30 Historically, they have-
16:31 And what's with that?
16:33 What is it with that?
16:35 They're trying to cite some state law change.
16:38 They just don't want to do it properly.
16:40 So rather than, we used to get some
16:44 of our property tax in January and February.
16:49 So just maybe 60 days before we would have received
16:53 it otherwise if we passed this ordinance.
16:55 And then likewise, the August collection,
16:59 we would get some in July and then the true up in August.
17:03 And they just sent another, just before this meeting,
17:07 because a couple of school districts were complaining
17:10 that how are they gonna do their cashflow,
17:13 but they don't look like they're going
17:15 to change their minds about these advances.
17:18 So we can probably strike, is it 2026-22?
17:25 Councilman Bullock.
17:27 Thanks, Director Mahoney.
17:28 Just to interject here while we're at it,
17:31 let's close the wrong window here.
17:34 Is your inference from the county,
17:39 is that an administrative change just to save time
17:43 and efficiency or is that a cashflow bottleneck they face
17:47 or is it an expense to the county to do it that way?
17:50 Because when you give, you transfer money earlier,
17:53 it's more favorable to the recipient, right?
17:56 So I don't know if you've-
17:58 Sure, they just sent us at 615.
18:00 I'm mostly just curious myself.
18:05 And I'd be happy to send this to council after.
18:17 it says last year Cuyahoga County
18:19 did not receive certified values until December 24th.
18:22 So that's a quick turnaround for them
18:24 to get then advances out to all the cities and schools.
18:31 And then they cite five Ohio house bills
18:38 expand authority for budget commissions
18:39 to reduce unnecessary voter,
18:42 I don't know how that affects advances.
18:46 Oh, because the new laws require additional calculations,
18:48 review steps and coordination,
18:51 they'll add processing time.
18:55 So, and then they did a survey
18:58 where they found 15 counties provide advances
19:01 only upon special request,
19:03 nine counties limit special request advances
19:06 solely to schools and townships.
19:08 So I think they're saying with the added calculations
19:12 because of the new house bills
19:15 and that other counties don't give advances
19:18 that they're going to stop giving advances.
19:20 And is that permanent or just for this year?
19:23 I'm assuming it'll be permanent.
19:25 They don't say it though.
19:27 Yes, and in my other hat,
19:31 working for an entity that drives 60 to 70% of its income
19:34 from property taxes.
19:37 This is the new way the county
19:39 is gonna be doing things in a particular like,
19:42 now Director Mahoney,
19:43 is our cash flow in a state where that's okay for us?
19:48 For school districts and other special districts
19:52 such as park districts can be a big deal
19:56 to not have a lot of money early in the year.
20:00 And so it's gonna be a cashflow issue.
20:03 Talk to your county council people about this
20:05 and see if this is maybe can be a one year thing
20:07 and then it doesn't continue on.
20:10 Cause I don't think there's any new law
20:11 that requires them to do this.
20:12 What they're saying is convenience basically.
20:15 Right, that it takes them longer to calculate things.
20:17 And so they can't get the calculations out
20:21 and prepare the advances.
20:25 in relation to this discussion, Director Mahoney,
20:27 one thing I will ask you is,
20:30 since it seems like there may be a deluge of complaints
20:33 against the county from entities that get money this way,
20:37 would it behoove us to pass this?
20:39 I did think about that.
20:40 I mean, it wouldn't hurt, I guess, to pass.
20:43 And if they don't take it, they don't take it.
20:46 But at least that's council saying,
20:49 you have a point there
20:50 that we still want the advances.
20:54 So which resolution is that that deals with you?
20:57 That is 22, I believe.
21:07 Well, I hope they change their mind.
21:10 For school districts and other special districts.
21:16 Well, that's helpful.
21:17 Thank you, Director Mahoney.
21:18 And then going through the resolutions,
21:21 I guess we'll start with 26, 2021,
21:25 the relevant chart being on page nine of the agenda.
21:31 Is there any way we can get that up on the screen?
21:36 Because this, I think, is the chart that really explains.
21:45 Is there any way we can get the agenda?
21:48 Because it's page nine of the agenda.
21:59 And I just think it's important
22:00 because we can go through each line item and explain
22:07 what each one of them is and when they were voted.
22:18 It'll be in finance committee agendas.
22:20 It's our website as we,
22:23 if you go to calendar, you can find it.
22:25 That's probably the easiest way.
22:30 You go to today, it'll be finance committee.
22:34 And then there's an agenda link.
22:48 It takes a minute to open up for some reason.
22:51 And there's the agenda.
22:52 Mr. Chair, this makes for great radio here.
22:56 But I think this chart is that important.
23:01 There, there you go.
23:01 And then page nine.
23:03 I'm trying to fill the time.
23:12 Hey, Director Mahoney, can you go to page nine?
23:17 Hey, Director Mahoney, can you walk us through this chart
23:19 and explain it to us?
23:21 So, and actually when we go to calculate this,
23:28 we also do a rough estimate.
23:32 And that's on the next two pages
23:35 of revenue and expenses.
23:39 What the purpose of this is to show
23:41 that the county that we need,
23:43 the property tax for the next, the following year.
23:48 So we start with an estimate
23:49 of how much we think we're going to end the year.
23:54 And then generally increase the revenues
23:59 between two and 4%.
24:00 And we increase the expenditures between two and 4%.
24:05 As a reminder, the labor contracts
24:09 all have a 3% increase in them.
24:11 So depending on the various expenses,
24:17 like I said, it's between the two and 4%.
24:20 Salaries being the most,
24:21 of course that's the 3% increase.
24:24 So we start with a general guess
24:28 of revenue and expenditures.
24:30 And then we also take what the county tells us for 26,
24:36 which was just about 1.1480,000 and change.
24:47 We have a 96.5 collection rate.
24:51 So if we divide that 1.1480,000,
24:56 that's how we get that 15,148,430
25:01 for general fund for that first line.
25:03 That represents, that was a levy passed in 1948
25:09 by the voters to fund the general fund.
25:16 And then we do likewise with the fire and police
25:22 Those were all levies passed by the voters,
25:25 1958 and 59 respectively.
25:28 And then the inside millage,
25:30 we always have historically put it to debt service
25:33 to pay our debt service.
25:36 And as a reminder, that's 10 mills maximum
25:40 between the city, the school,
25:43 and the county and metro parks and all those.
25:47 So that's where we start with those numbers.
25:54 I guess, what question is gonna answer?
26:02 Yeah, and then for the benefit of people
26:06 that may watch this video later,
26:07 maybe watching it now, and also for my colleagues,
26:12 if you'll remember the county has a three year cycle
26:16 where they reevaluate properties,
26:18 but then the sextennial, which is every six years,
26:21 they do a really full reappraisal.
26:24 So the mid-year three appraisal is a slight update,
26:29 whereas the six year requires a more rigorous review
26:32 of properties and values.
26:35 We recently had that in calendar year 25,
26:40 which then affected valuations for,
26:47 I believe it's 26, 27, and 28.
26:55 So this same, you know,
26:58 roughly $30 million in millage in the 17.4
27:03 will be the same, if not a little less,
27:06 on the residence for tax year 2027,
27:11 because we're still within that three year window.
27:16 And the overall valuation of Lakewood
27:19 is within that three year window.
27:20 And the only thing that might have happened
27:21 is actually people may have filed complaints
27:23 against their valuation,
27:25 and it may have slightly gone down.
27:27 So when, for example,
27:28 when I looked at this ordinance from last year,
27:30 the estimated amount for general fund was like 15.5,
27:35 as opposed to 15.14.
27:39 What that tells you is that the valuation of Lakewood,
27:43 because people got their update, didn't like it,
27:47 filed a complaint with the county,
27:48 maybe the valuation went down a little.
27:52 But the next time, right,
27:53 so after 27 and into 28,
27:57 there will be a midterm update
27:59 where the valuations might change.
28:00 It might go up, it might go down.
28:02 I suspect they would go up, but who knows.
28:05 But it would be a slighter update than the six year one.
28:08 So right now, what this effectively means
28:11 for our residents and our property owners here
28:14 is that roughly what they paid the city
28:17 last year in taxes is the same
28:19 they're gonna pay the city in taxes this year.
28:21 That's what this authorizing resolution would do.
28:27 Now, there is some discussion about going forward
28:31 if there's a bigger uptick.
28:35 Are there ways in which we can,
28:37 you know, in three, in two, in a year,
28:41 is there a way in which we can think about
28:43 being thoughtful about how these go up, right?
28:46 You can do some sliding, right,
28:48 where you only say in the first year
28:50 of the new big update,
28:53 say property values went up 50% or something crazy.
28:56 We could talk about with the administration
28:59 and the public about only taking a portion
29:03 and then kind of ticking it up over the years
29:05 so it's more of a graduated thing
29:07 than it is a one year hit on the residents.
29:09 Now, for purposes of this resolution,
29:12 the more I've dug into it,
29:14 it's essentially the same as last year.
29:16 Your property tax bill is gonna look the same.
29:21 You know, depending on what the schools do
29:22 with their levy in May,
29:23 but that would be in,
29:27 it would go on account of your 2027 as well.
29:29 So any, so I'm prepared to, you know,
29:33 hear from my colleagues on this,
29:34 but also as I dug into it,
29:37 what it revealed to me was
29:38 this is the same as it was last year.
29:40 Any other comments or discussions?
29:42 I assume we'll have some.
29:50 So from a couple of quick questions.
29:54 First, do you know the Director Mahoney,
29:56 do you know the date of the inside millage?
29:58 Is that even older than the 1948 first voted?
30:03 I'm not, that was years and years ago,
30:06 the state that was unvoted inside millage.
30:12 Yeah, I'd be curious.
30:14 I suspect it is older than that,
30:16 but it's possible it's more recent
30:21 if some county procedure change, right?
30:26 So in other words, we've held continuous
30:29 in a good way, I think, for a long time.
30:32 Now what's different is we've experienced
30:35 high property value increases
30:38 and we're hearing certainly that
30:40 a certain number of Lakewood residents
30:42 feel the affordability pressure
30:45 of all those costs.
30:47 So kind of it's on my mind to see
30:49 if we can be strategic in our budgeting
30:52 and understand could there be ways to save?
30:57 Could there be ways to assess our fund balances
31:02 and our ability to invest in capital
31:06 in a way that it says
31:09 that we're not just on autopilot at all times
31:15 to collect everything that we are entitled to
31:23 under these traditional levels.
31:31 That's a big question.
31:33 And I don't have a proposal today,
31:36 but I guess I'd like to understand
31:38 whether we're evaluating those questions
31:42 as we prepare next year's budget.
31:44 And this kind of dovetails in what we said,
31:46 if we're tracking the actuals
31:48 as we work through budget year 2026
31:52 and we look at our actual incurred expenses,
31:55 our actual collected revenues,
31:59 if we're positioned to be in financial strength,
32:05 then rather than only look at the traditional expenditures,
32:10 can we make some room or financial capacity
32:13 to help some residents who are under financial pressure?
32:19 And this set of ordinances is the one time
32:23 that we've got on the revenue side
32:25 to shape what we do.
32:30 The finance chair's points about the calendar
32:35 for property tax is well taken
32:39 because we're in the middle of the first three year period
32:42 after a full assessment,
32:44 and then we're gonna do, before we know it,
32:48 a mid or three year estimate,
32:51 which typically has a lesser impact,
32:54 but still could well have an impact.
32:57 So I'm not very concise today.
33:00 Maybe, Director Mahoney,
33:01 if I pull together some questions around the big picture,
33:05 the macro, and we're just talking revenue side here today.
33:10 Of course, any budget exercise
33:13 has to compare revenues to expenditures.
33:16 We're not getting expenditures right now,
33:19 but we're not getting any expenditures right now.
33:23 We're not getting expenditures right now,
33:25 but as our revenue side's improved,
33:34 can or should we evaluate our revenue side
33:38 while we also manage the expenditure side?
33:42 Another follow on question would be,
33:44 is it the administration's view
33:46 that all of our revenue increases
33:48 have been consumed by inflation,
33:51 or do we think that's only part ways true
33:55 and in other areas, we're gaining ground
33:58 in terms of financial strength and capacity?
34:00 I have some educated inferences I can make
34:03 from our budget work last year,
34:08 but I wouldn't wanna assume
34:10 that I'm fully reading things accurately.
34:13 I know also we're trying to get ahead
34:15 on the wastewater treatment plant work
34:19 and the wastewater sewer system work,
34:21 which is a big expense too.
34:25 So that's not very concise at all,
34:28 but do you understand the questions
34:30 I'm beginning to try to get my hands around?
34:34 Sure, so I can show you from my point of view
34:37 is yes, the first year of a three-year increase,
34:42 the city usually does have a little bit extra resources
34:47 that was one of the end of the year transfers last year.
34:52 We transferred, I can't remember now,
34:56 somewhere around a million dollars,
34:58 I believe to capital,
35:00 so we can start to try and not debt out so much,
35:06 because the city is paying a lot in interest expense
35:10 because the historical trend of the city
35:13 was to debt most of its capital.
35:15 So we were able to consider for this year
35:19 not taking some debt out for some projects and vehicles.
35:24 The second year is kind of the mid of this three-year cycle
35:29 and I would expect and hope that we will have,
35:32 again, some reserves from this increase this year.
35:36 But then the third year,
35:38 and you think about it,
35:39 yes, there was an increase in that first year,
35:42 but our expenses keep going up every year.
35:45 For three years, it's flat for the city.
35:47 So obviously that revenue over expenditures
35:53 is quite less in year three than it was in year one.
35:57 And actually the expenditures are shown.
36:00 Again, it's a very rough estimate,
36:03 starting on page 10 of the agenda.
36:10 And even with the estimates,
36:13 you can see that in general fund
36:16 and with this estimate in property tax,
36:20 we are estimating that the general fund balance
36:22 could go down quite significantly at the end of 27.
36:28 And again, these are rough estimates.
36:29 So the purpose of this is to prove to the county
36:33 that we need these property taxes.
36:37 I do know of one jurisdiction
36:42 where the county treasurer questioned
36:45 whether they needed the property taxes.
36:48 So that's what the county does with this information.
36:51 They go through and look and see
36:54 if what we're asking in property tax revenue is justified.
36:58 And I believe they all have no problems
37:00 looking at this saying,
37:01 yes, city of Lakewood needs these property taxes.
37:05 Yes, and to your point, director Mahoney,
37:08 some of the newly approved laws
37:13 allow the budget commission to actually access it.
37:15 If they, and there were some issues in Medina County
37:18 where they proposed that and then went back
37:22 but they're probably gonna do it in the following year.
37:24 So it's very concerning.
37:27 Now, the one thing I will say just like
37:29 from a high level is, you know,
37:32 as we think about these things in the future,
37:34 you know, we could say, okay, this year,
37:36 there was a big jump.
37:37 So we're gonna level off that increase.
37:40 That levels it off for everyone,
37:42 the richest among us and the poorest among us.
37:45 There's also more creative ways.
37:47 And so I guess what I'm saying is I'm prepared
37:49 to pass this tonight favorably to council one vote.
37:54 But as we think about the years to come,
37:57 there's another way where you can, you know,
37:59 work with the administration to think about,
38:01 okay, dedicating certain portions
38:03 of that additional revenue
38:04 for seniors on a fixed income,
38:09 or, you know, other classifications
38:13 what would be easy administratively
38:14 for the administration to say, okay,
38:16 you get this exemption from the state.
38:18 So we don't have to verify any more paperwork.
38:21 You also get a double exemption
38:22 from the city or something like that.
38:23 That's something we can do creatively
38:25 as we think about how to handle
38:28 some of these issues going forward.
38:30 That's just a suggestion.
38:31 Any other thoughts from my colleagues
38:35 or other people on this councilman Bixenstein?
38:39 Thank you, chair Baker.
38:40 And this might be in a pretty similar vein
38:42 as councilperson Bullock,
38:43 but, you know, as someone who's relatively new
38:47 to this process, I'm learning about this terminology
38:49 and particularly about inside millage.
38:52 And I was just wondering,
38:53 obviously a very important revenue funding stream,
38:57 but also as councilperson Bullock brought up,
39:00 people are feeling the pinch of property taxes.
39:02 And I was just wondering,
39:03 is there any precedent in Lakewood
39:05 for not taking the full,
39:09 the maximum, the 10 mil maximum for inside millage?
39:14 There hasn't been no precedent before that I know of.
39:18 And I did share with the chair,
39:26 and it might've been before you were on council,
39:29 a little property tax overview,
39:30 and I'd be happy to share it with everyone.
39:32 You could pull it up, clerk.
39:34 I think it's just in one of the other documents.
39:52 And if you could just go to the second page, please.
39:56 Yeah, just scroll down a little bit more.
40:00 So see, there's the inside millage
40:02 where the county takes 1.45,
40:06 the Metro Parks takes 0.05,
40:08 the schools is 5.03,
40:09 and the city is 3.47.
40:11 If we gave up some of our inside millage,
40:13 I'm not sure how it would work,
40:14 but could the schools or the Metro Parks
40:16 or the county take more of it?
40:20 So I would hate to give it up
40:23 that somebody else would just take it, you know?
40:27 Director, I do think the question is broader though,
40:29 and not just necessarily the inside millage,
40:31 but also the other voted on charter stuff,
40:38 it's kind of has superpowers like inside millage
40:41 in the sense that it's not subject to House Bill 920,
40:44 So yes, council could vote
40:48 to not take some of the millage,
40:51 but then council also has to tell me
40:54 what expense it's not to do, you know?
40:56 So, you know, I think I did a rough estimate,
41:00 like 0.5 mills to the general fund
41:04 is just about a million dollars.
41:07 So what would I then cut a million dollars worth?
41:12 So that has to go hand in hand.
41:14 Yes, Councilman Buller.
41:15 Thank you, Director Mahoney.
41:16 I appreciate the clarification.
41:18 Sorry, sorry, councilman, were you done?
41:22 Okay, so it's a good discussion.
41:26 Of course, Director Mahoney,
41:27 we don't just collect a dollar and it's out the door.
41:30 So if we reduce revenues by a dollar,
41:34 we're not instantly triggering a cut
41:36 of an employee or an expenditure.
41:38 We have various accounts and reserves right now.
41:41 The goal is not to erode financial strength at all.
41:47 But I think it's been a helpful discussion
41:52 to at least begin to put on the table
41:54 for the first time that I've been around,
41:57 the idea of prioritizing affordability for residents.
42:04 And my hunch is that the reason for that
42:11 is that we haven't had this financial strength
42:14 until the last six years or eight years,
42:17 depending on how you measure.
42:19 And that's really accelerated post COVID
42:23 and the most recent property reevaluation.
42:27 It was starting and prior to that,
42:28 thanks to the good work of Lakewood Live
42:30 and Lakewood Building Department
42:32 and a bunch of people, right?
42:33 Lakewood Public Works, Lakewood Police.
42:36 The whole town has been really
42:40 just investing all its energy and creativity
42:42 into making this place sing
42:45 and people are responding.
42:45 So that's a recent thing.
42:47 And we were recovering from a financial hole
42:54 and that it was actually a multiple financial hole,
42:56 some local, some state, some nationally economic.
43:00 And then for a while we were
43:02 at a financially holding water
43:05 and trying to improve through staffing productivity
43:10 and staffing efficiencies.
43:12 And we had years where the three year contract
43:15 was zero zero one or on that order.
43:21 And the HR gain was that we were not reducing head count
43:28 and we were maintaining benefits
43:30 and those are all mattered too.
43:32 But now we're in a different world.
43:33 So I think that's where that comes from.
43:36 And then of course we're hearing
43:37 from our partner local government
43:39 that they're in need of an increase.
43:42 So that's at least on my mind.
43:44 I'm not trying to speak for others.
43:46 But to your point, Director Mahoney,
43:49 like tread carefully because there's big impacts here.
43:53 And I certainly don't claim to start out understanding
43:58 all the complexities,
44:00 which is why I'm just asking questions now.
44:01 And I think I would appreciate if,
44:04 I'd be happy to support motions
44:06 to recommend adoption of these tax budget documents
44:12 What council's doing I think is authorizing
44:14 the finance director to engage
44:16 with the county fiscal officer.
44:19 And the county is the one that makes final decisions
44:22 and then traffic cops and collects
44:25 and then disperses the actual tax dollars.
44:28 So we have to talk to them using their process
44:31 and that's appropriate.
44:33 And thank you for bringing this to the table.
44:36 But I do find it helpful given that I think
44:39 in the last several years we're in new territory,
44:44 at least in terms of the resident affordability
44:46 side of things to begin thinking
44:48 about potential solutions there.
44:52 At least that's one person's, one's council.
44:56 By the way, if anybody recalls last fall
44:58 we had a visiting speaker or two
45:01 from about state tax policy.
45:04 And the short version is that the state really
45:07 doesn't give local governments a lot of options
45:10 for targeting this kind of relief.
45:14 There could be better tools
45:16 and some are advocating for that.
45:18 Heavens only knows if we're gonna get any tax reform
45:21 at the state level.
45:22 But the idea would be if you have some residents
45:25 in need, could the city be responsive
45:27 to targeting those residents in need?
45:30 Right now the answer's only very perfectly,
45:33 although I think Councilman Baker has some ideas
45:37 that are pretty creative on the city collects
45:40 and has direct expenditure.
45:43 Yeah, I don't often quote the former mayor
45:46 of Cleveland, Frank Jackson,
45:47 but he always said the calvary's not coming.
45:51 So the state of Ohio is not gonna come and save us.
45:53 We have to save ourselves.
45:57 So to your point though,
45:58 so I think my general thought is that we collect
46:03 and then think in the budget process
46:04 about creative ways to provide relief
46:06 to people who need it in ways
46:08 that wouldn't be overly administratively burdensome.
46:11 Now that's gonna be part of the budget process.
46:14 So let's think about that.
46:16 Any other thoughts or comments?
46:19 At this point, I will go ahead and make a motion
46:24 to favorably refer resolution 2026-21
46:29 to full council for approval.
46:32 Motions are made and second.
46:36 All those in favor say aye.
46:38 I'll go ahead and make a motion
46:41 to favorably refer resolution 22-2026
46:45 to full council for approval.
46:48 Motion made and second.
46:51 All those in favor say aye.
46:53 And I will go ahead and make a motion
46:55 to favorably refer resolution 23-2026
47:01 to full council for approval.
47:04 Motion made and second.
47:08 All those in favor say aye.
47:12 No further business come before the finance committee.
47:16 We are hereby adjourned
47:16 and I think we have 12 minutes
47:17 of the full council meeting.